The impact of the power plant closing will be felt throughout the city in the loss of jobs and tax revenue from the plant itself. While the city will feel the effects, the school district could be hit even harder.
AEP said the decision to close the plant is due to the cost of the power produced by Oklaunion. Company officials say it is no longer competitive, but the 2020 closure is something city officials have known about for a while.
“We already knew before the announce that it would be coming, we just didn’t know when. I’ve been here about 18 months, so all along i have known this in the back of my mind,” said City Manager Marty Mangum.
And although the city will feel the impact, the loss of tax revenue will hit the school district the hardest.
“I don’t have the exact numbers in front of me but it will be mind boggling,” said Jeff Byrd, Vernon ISD superintendent. “They are our biggest taxing entity within the district. That’s how we generate funds locally. A rough estimate, that is going to cost the district about 1.5 to 2 million dollars a year.”
The city will not lose any tax revenue, but the effects will still be felt.
“It will be a huge impact to us if we lose some population because of that. It’s disappointing. It affects the sales tax revenue. It affects everything,” Mangum said.
“As other taxing entities feel the effects it will have a trickle down effect to us,” Byrd said.
That’s why the school district and city leaders are busy now.
“In the next 18-24 months we are going to have to put at least 2 million dollars away to make it that first year,” Byrd said.
“Mainly you just track to see what the effect is going to be and you see where you can cut to make your budget a little more lean to offset the loss of revenue,” Mangum said.
Time will tell the true effects of the closure, but in the meantime both city leaders and district officials are thankful they have time to prepare for what’s to come when the plant shuts down operations for good.
Christina Donelson, executive director of the Vernon of Chamber of Commerce, said they have been told the power plant could close earlier if the equipment at the plant starts to break down.